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Tech Stocks This Week: Amazon's Big Hardware Bet and Apple's Launch Day

By Daniel Sparks - Sep 21, 2018 at 7:17PM

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Can these two tech companies attract new customers with fresh Alexa-enabled devices and new iPhones?

Two tech giants grabbed headlines this week with big product news. Amazon.com (AMZN 0.20%) announced a huge new lineup of hardware, including a whopping 14 new devices. Then, on Friday, Apple (AAPL -0.15%) started delivering its new iPhone XS, iPhone XS Max, and Apple Watch Series 4 to notable crowds around the world.

Here's a look at each of these stories -- and why they matter to investors.

Echo Auto in a vehicle

Echo Auto. Image source: Amazon.com.

An Alexa frenzy

Amazon already had the most robust lineup of voice-assistant devices of any of its tech peers, but the company's impressive list of Alexa-enabled devices just got much bigger. On Thursday, the company not only refreshed its Echo Dot, Echo Plus, and Echo Show, but it released a range of entirely new Echo devices. Here are just a handful of the all-new devices: 

  • Echo Auto, or a device for users to interact with Alexa in their cars.
  • An Echo Wall Clock that serves both as an analog clock and helps users manage their voice-enabled timers, alarms, and reminders.
  • An input device that taps into external speakers to give Alexa a voice.
  • A wireless subwoofer to pair with Echo devices.
  • An Alexa-enabled Microwave.

The new products come as Amazon continues to invest aggressively in Alexa's artificial intelligence. The company says it has "thousands of engineers and scientists inventing on behalf of customers" to make Alexa and Alexa-enabled devices better. 

Apple's pricing power persists

When Apple unveiled its newest smartphones last week, one concern some investors may have had was the high prices of the new devices. Would consumers pay up for even pricier iPhones?

Apple's new flagship lineup of iPhones -- the XS and XS Max -- took iPhone pricing to new levels. Sure, the smaller iPhone XS has the same starting price as the iPhone X did at its launch ($999), but the larger iPhone XS Max starts at $1,099. Even more, prices for the new phones range all the way up to $1,449.

Still, big crowds at many Apple stores across the world on Friday, as it makes its newest products available, suggest the company's pricing power with consumers remains strong. For instance, several hundred people waited in line at stores in Singapore and Dubai, and Apple posted pictures of extremely busy stores in Japan, London, China, and New York City. 

A packed Apple store after the iPhone XS launch in China

An Apple store on Sept. 20 in China. Image source: Apple.

Gauging demand for the new iPhones by foot traffic at stores on launch day, of course, isn't a perfect indicator of how well the phone will sell. But analysts seem to agree that new phones will positively contribute to Apple's business, as many analysts have been raising their average selling price forecasts for the company's iPhone segment, according to CNBC.

Apple must also be expecting the new iPhones to do well, as management provided optimistic revenue guidance for the quarter that ends on Sept. 30.

Apple is also launching its new Apple Watch Series 4 this weekend. In addition, the tech giant will begin delivering its new lower-cost iPhone XR later next month. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

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